Islamic Banking Products comply with the Shariah laws which essentially prohibit Islamic banks from charging or paying interest on money lent or borrowed. Islamic Banks in the UAE offer some of the best finance products with competitive profit rates, accounts & deposits with attractive returns and credit cards with great features. With Islamic Banking gaining popularity in the region, many Banks have introduced Shariah Compliant products for finance and investments. Some competitive Shariah-compliant products being offered by banks in the UAE are mentioned below:
- Home Loans – Islamic banks offer home finance based on the Islamic principle of Ijarah which works like a lease contract. ADIB is offering home loans at the best available profit rate of 2.99% (fixed for 2 years), RAKBank at 2.99% (fixed for first year) and EIB at 3.49% p.a.
- Personal Loans – Islamic personal loans are available based on Services Ijarah or Goods Murabaha (a sale contract) for up to 4 years. Ajman Bank offers personal finance at the lowest rate of 3.99% & Noor Bank at 5% p.a. ADIB also offers finance for debt-consolidation at 5.49%.
- Car Loans – You can get Shariah-compliant car loans to finance 80% of the car value. DIB’s auto finance starts at 2.25% and Noor Bank’s at 2.49% p.a. (flat rates, for new & used vehicles). Most banks also offer special deals, for e.g., ADIB car finance starts at 0% for Lexus cars bought from Al Futtaim Motors.
Islamic Credit Cards:
- Free-for-life cards – Free credit cards have no annual fees, but could charge a higher profit rate, for e.g., Al Hilal Bank charges 0.25% more for its free cards as compared to its similar cards with an annual fee. Other examples of value-for-money free credit cards are ADIB Etisalat Classic card and RAKBank Amal Standard card.
- Cashback cards – ADIB, DIB and EIB offer some great all-around cashback credit cards. You can get 10% cashback on Etisalat & Du spends, 5% at electronics stores and 1% on all other purchases with EIB’s Cashback credit card. Noor Bank’s Wafa credit card can get you up to 11% cashback when you shop at Aswaaq community stores.
- Travel rewards cards – ADIB Etihad Guest Visa credit cards & EIB Skywards Visa credit cards are Islamic credit cards that offer great travel rewards like miles on your credit card spend, discounts on travel-related expenses, complimentary concierge services & airport lounge access.
- Current Accounts – These are non-profit earning accounts that give you easy access to your funds with no restrictions on transactions. Islamic banks offer a variety of current accounts.
- Savings Accounts – Islamic Savings Accounts earn a profit share based on the principle of Mudaraba or Wakala. Banks declare profit rates and distribute them to customers’ accounts every quarter. Most Islamic banks also offer savings accounts for children as well as for exclusive online use. Profit rates for savings accounts range anywhere from 0.2% to 0.6%.
- Hybrid Accounts – These accounts combine the transactional ease of a current account and attractive returns of a savings account. Some examples are the DIB Al Islami 2-in-1 Account and the RAKBank Amal Advantage Account.
Lucky Draw-linked Islamic Savings Programs:
Here are some examples of these:
- ADIB Ghina Savings Program – This product offers 1 Grand Prize of AED 3 Million & 3 prizes of 1 kg Gold each, every 4 months, and 20 Monthly draw prizes of AED 10,000 each. You get 1 entry on opening a Ghina Account with AED 20,000. You need 4 entries to qualify for the Grand Draw.
- EIB Kunooz Savings Account – You can win a monthly Grand Prize of AED 1 Million, a studio apartment or a luxury car and daily prizes of AED 5,000. To get 1 entry into the monthly draw and daily draw, you need to deposit AED 5,000 and AED 1,000 to the account respectively.
- ADCB Millionaire Destiny Savings Account – There is a Grand Prize of AED 1 Million and 10 prizes of AED 10,000 each to be won every month. To qualify, you need to have a minimum average account balance of AED 5,000.